Mumbai: CAG audit report indicts BMC for irregularities

Devendra Fadnavis. File pic

Finance Minister Devendra Fadnavis on Saturday presented a special audit report of the Brihanmumbai Municipal Corporation (BMC), in which the Comptroller and Auditor General (CAG) has found lack of transparency, systemic problems, poor planning, and careless use of funds in the civic body.

On the last day of the budget session, the ruling party members demanded action by the Anti-Corruption Bureau or by a committee of legislators. Fadnavis said as per the procedure, the report would be sent to the Public Accounts Committee for further action.

"This is just a trailer. It's only about the work costing R 12,000 crore," said Fadnavis while making a statement on the CAG report. He read out the highlights to the house and assured BJP's Amit Satam that the government would think about probing the corruption angle. However, he refused to form a committee of MLAs to probe, saying that the previous government had set a bad precedent by forming such a panel to probe the tree planting.

The CAG was commissioned to audit the period between November 28, 2019 and October 31, 2022, most of which had Uddhav Thackeray as the Chief Minister and his party, the then unified Shiv Sena, in power in the BMC. Thackeray was replaced in June 2022. A period between July 2022 and October 2022 falls in the Shinde Sena-BJP regime. The new government had ordered a CAG probe after allegations of corruption, especially during the pandemic, were raised. The works costing R 12,023 crore by nine departments were specified for the audit.

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However, the BMC, which has been governed by an administrator since the term of house expired early last year, refused to furnish the expenditure records for the mitigation of Covid-19 (R 3538cr) despite repeated requests, said the CAG, adding that the non-submission of records had deprived the civic body of crucial audit inputs, which would have been beneficial for any course correction and systemic improvements.

The audit says the BMC awarded 20 works across two departments, valued at Rs 214.48 crore, without inviting tenders and in violation of its own vigilance rules. In 64 works costing R 4,755.94 crore, the contract agreements were not executed between the contractors. The absence of agreements denied the BMC legal means against the defaulting contractors. In 13 works costing Rs 3,355.57 crore across three departments, third-party auditors were not appointed to assess the works.

The report also states that the BMC paid a huge amount for a piece of land in Dahisar, which was reserved for a recreation ground, a playground and a maternity home, but was encroached upon. The BMC has paid 716 per cent more than the rate in 2011 for acquiring the land and in addition, it will spend another R 77 crore for rehabilitation.

Further, it pointed out irregularities in the Information Technology department for giving the previous contractor work worth Rs 160 crore without tendering. There has been no service against the maintenance contract of R 37 crore, it said. This SAP system handles the BMC's tendering process and a forensic report said that there was a scope for manipulation, but no action was taken.

According to the CAG, work on a bridge at Mahalaxmi Station was only 10 per cent complete in March 2022, which was the deadline for finishing the project. The contractor was favoured and given extra work of R 27 crore in violation of tendering conditions, it said.

The cost of the 4.3km twin tunnel in the Sanjay Gandhi National Park rose to Rs 6,322 crore from the earlier estimate of Rs 4,500 crore in August 2022, because the Forest Department's permission was not sought. In road and traffic management works, 56 items were audited by the CAG. Of these, 52 were chosen for concreting without surveying; new jobs worth R 54 crore were clubbed with the old work without tendering and micro silica was not used as construction material, but Rs 2.40 crore billed for it.

Other points in the report mention a students' hostel at the KEM Hospital which was built without the district collector's approval. The BMC was fined R 2.70 cr for the irregularity. A single contractor was allotted the Mithi River cleaning, despite a decision that four different contractors would be given the job over 24 months. The R 464 crore work on the influent pumping plant at Malad was given to a disqualified contractor, leading the CAG to note that malafide intentions cannot be ruled out.

Besides, in the global tendering for the Solid Waste Management department's ‘waste to energy project', the condition for the minimum daily processing capacity was reduced to 600 tonnes from 3000 tonnes while allocating the work to Chennai MSW. The CAG said the poor monitoring by BMC abnormal delays in obtaining the mandatory clearances is likely to have a significant impact on the project delivery schedule.